Today, we’re diving into a topic that many real estate investors grapple with—how to make money with properties that have no equity. It’s a common question, and we’re here to share some insights on turning these challenging situations into profitable opportunities. Here are a few key points we will focus on!
- How do you make money?
- What is a short sale?
- How can we help?
- What kind of leads get referred?
Let’s get right into it!
Understanding the Dilemma
So, you’ve come across deals in your pipeline where the seller has no equity. The big question is, how can you make a profit from such situations? It might seem counterintuitive, but there’s a strategy to navigate these deals and turn them into lucrative ventures.
Making Money with No Equity
We often encounter real estate investors who regret passing over deals with no equity. These missed opportunities can be turned around, and we’re here to show you how.
The Short Sale Strategy
One approach to making money with properties lacking equity is through short sales. In a short sale, the lender takes the loss instead of the buyer overpaying or the seller coming to closing with money they don’t have. Let’s break down how this works.
Imagine you come across a property where the sellers owe $300,000, but you need to purchase it at $250,000 to align with your numbers. In a traditional scenario, this would leave you with a negative $50,000 if you bought the house at your desired price.
Short Sale Benefits
However, in a short sale, the lender absorbs the loss. This means you can still purchase the house at a discount, and the seller can get out from under their mortgage. The beauty of a short sale is that it includes closing costs, payment to you (if you referred the lead), and settles any liens or encumbrances against the property. The seller doesn’t pay a dime, making it a win-win situation.
Overcoming Market Challenges
With the rise of short sales, you no longer need to worry about the property’s total owed amount. The bank allows the house to be sold at its as-is value, factoring in repairs, comps, and other considerations. This provides a unique opportunity to avoid competing with the traditional market and gives you the first right of refusal.
How We Can Help
If you find yourself dealing with properties lacking equity and are unsure how to proceed, our team is here to assist you. You can submit leads to us, and we’ll take care of the negotiation, paperwork, and processing. Whether you want to partner with us or simply get paid for the leads you refer, we have options for collaboration.
Referring leads is straightforward. Ensure the leads are warm—individuals you’ve already talked to and built a rapport with. We take referrals seriously, providing updates on lead progress every week. We understand the importance of communication and transparency, ensuring you’re always in the loop.
We believe in collaboration and partnerships. If you’re a wholesaler, real estate investor, or part of an acquisition team, let’s connect. Whether through Zoom meetings, office visits, or phone calls, we’re open to exploring how we can work together, regardless of the state you operate in.
Thank you for joining us today. If you have specific questions about a deal or want to learn more about working with pre-foreclosures, feel free to reach out. Don’t forget to check out our free one-hour pre-foreclosure class for valuable insights and a live Q&A session.
For more in-depth case studies and educational content about short sales and pre-foreclosures, check out Nicole’s books “Short Sales Uncensored” and “How To Master Short Sales” on Amazon. These can be valuable resources to guide you through the process. Additionally, you can join the Facebook group, “The Only Short Sale Group Worth Being A Part Of”, to ask questions and gain insights from experienced professionals. Always feel free to reach out to us if you have any more questions or if we can help in any way.